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Health Canada has issued a press release stating that it is changing the application process for licences to cultivate cannabis, process cannabis or sell cannabis for medical purposes (Commercial Licenses).

Effective immediately, Health Canada will require new applicants for Commercial Licences to have a completed site that meets all the requirements of the Cannabis Act (Act) and Cannabis Regulations (Regulations) at the time of their application.

These changes are being implemented following a review of the current application process, which found that significant department resources were being used to consider applications from applicants that were not ready to begin operations. This in turn significantly contributed to wait times for prepared applicants and resulted in an inefficient allocation of existing department capacity.

For existing applications for Commercial Licenses, Health Canada has indicated that it will complete a high-level review of applications currently in its queue. If the application passes this review, Health Canada has stated that it will provide a status update letter to the applicant. Once the applicant has a completed site that meets the other regulatory requirements of the Act and Regulations, Health Canada will review the application in a priority determined by the original application date.

Additionally, in an effort to support prospective applicants, Health Canada will: (i) release additional guidance on the revised licence application process and the related regulatory requirements; (ii) establish service standards for the review of applications; (iii) provide enhanced support to Indigenous-affiliated applicants through its Indigenous Navigator Service; and (iv) implement additional support for applicants applying for micro-class licenses.

While Health Canada has stated that these changes are intended to improve the administration of the cannabis licensing process, they may also be an attempt to slow the pace of applications, as Health Canada indicated that it expects current licensed capacity to be sufficient to meet independent demand estimates. While the changes may restrict established licensees’ growth strategies, reduce access to capital and create more barriers to entry for start-ups, they may also inject more predictability into the process for mature applicants and well-capitalized companies.